Persons who are disqualified by law from entering into a contract are given below:
1. Alien enemy:
All persons other than Indian citizens are aliens. When the sovereign or the state of that alien is at peace with India, he is an alien friend. Contrary to it, he will be an alien enemy.
An alien friend living in India has full contracting competency subject to certain restrictions, which may be imposed by the Government of India, e.g., an alien cannot acquire any ownership interest in Indian shipping.
In case of outbreak of war between India and the alien country, the following rules apply for the performance of agreements:-
No contract can be made with an alien enemy during the subsistence of war, except with the prior approval of the Government of India.
Performance of the contracts made before the outbreak of war will be suspended during the course of war. They can be performed only when the war is over. Even then, the government can put restrictions on the performance of such contracts, if it considers them necessary for national interest.
2. Foreign sovereigns and ambassadors:
Foreign sovereigns and accredited representatives of a foreign state or ambassadors enjoy special privilege, by which they cannot be sued in Indian courts. However, they can, if they choose, enter into contracts and can enforce such contracts in Indian courts.
Ex-kings are not entitled to this privilege and therefore, can be sued in Indian courts just as ordinary citizens.
In India, under Sec. 86 of the Civil Procedure Code, previous sanction of the Central Government is to be obtained, for suing the rulers of foreign states, ambassadors and envoys.
A convict is a person, who is sentenced by a competent court to the death sentence or imprisonment. A convict cannot enter into a valid contract while undergoing sentence, nor can sue. His incompetency is over, when the period of his sentence is over or he is pardoned.
Thus, the competency right to make a contract or sue is only suspended during the course of his sentence and is not lost. Whenever he is freed, he regains such rights.
4. Professional persons:
It is only in England, where the barristers cannot sue their clients for their professional fees. In India, no such rule exists.
In India, every barrister, who has got himself enrolled as an advocate of an Indian High Court can sue his clients for his fees. Under Indian Bar Councils Act, 1927, enrolment of an advocate is necessary before he can practice.
Corporations include registered companies, local bodies and city corporations. Corporations are legal artificial persons. Since they have legal existence, they can acquire property, transact their business and are capable of suing and being sued. But they cannot do so without their seals.
Powers of a corporation are limited by its Memorandum of Association, beyond which it cannot do anything. This is because contracts which are ultra vires of the objects of the company, shall not be binding. Even such contracts cannot be ratified by passing a resolution in the general meeting of the company members.
6. Married women:
Law has not made any distinction regarding contractual capacity of males and females. A woman, whether married or unmarried, enjoys the same contractual capacity as a man. Whatever property a woman possesses, she has absolute ownership over it.
She is free to deal with her personal property in the way in which she likes. Her husband is not at all responsible for her contracts.